Small Business Grants for Solar Energy

by Tom Chmielewski, Demand Media

State and federal programs can assist small business involved in solar energy.

photovoltaik image by Otmar Smit from Fotolia.com

High technology grants and tax incentives for production and use of renewable energy equipment, including solar energy, are available on the state and federal level. Tax credits are the most common incentive for small businesses involved with solar energy, and they can represent a significant savings. One major federal grant program offers eligible businesses a choice of taking either a tax credit or a grant.

DSIRE Listing

The U.S. government’s Database of State Incentives for Renewables and Efficiency (DSIRE) lists available incentives by state for renewable energy grants and tax credits. The listing covers many different programs on the state and local level. In Texas, for instance, companies that manufacture, sell or install solar energy devices are exempt from the state’s franchise tax. The franchise tax is the equivalent of a corporate tax. There is no ceiling on the exemption, so it represents a substantial tax savings.

U.S. Grants

One major federal grant and credit program for business is the federal American Recovery and Reinvestment Act of 2009 for new construction in commercial, industrial or agricultural sectors. Buildings that utilize active solar energy equipment for electrical or heat generation, or other uses besides passive solar energy designs, can receive up to 30 percent of the property value as a credit or a grant from the U.S. Department of Treasury. Taxpayers eligible for the federal Business Investment Tax Credit or the Renewable Energy Production Tax Credit may apply for the grant. Property must have been placed in service in 2009 or 2010, or construction must begin by Dec. 31, 2010, to be eligible.

Technology and Research

The Small Business Administration (SBA) has an Office of Technology to administer grant listings through the Small Business Innovation Research Program (SBIR) and the Small Business Technology Transfer Program (STTR). The SBA uses the programs to allow small, high-tech businesses with innovative practices to play a significant role in the federal government’s research and development efforts. The programs post requests for proposals from 11 federal departments participating in SBIR, and five departments offering grants through the STTR program. The grants cover a wide range of high-tech initiatives, including renewable energy and solar power development. The two programs award $2 billion annually to small, high-tech businesses, according to the SBA.

About the Author

Tom Chmielewski is a longtime journalist with experience in newspapers, magazines, books, e-books and the Internet. With his company TEC Publishing, he has published magazines and an award-winning multimedia e-book, "Celebration at the Sarayi." Chmielewski's design skills include expertise in Adobe Creative Suite's InDesign and Photoshop. He holds a Bachelor of Arts in English from Western Michigan University.

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